A Level GCSE Secondary Secondary Business Secondary Economics

Secondary Business: Tesco’s fall from grace

The news of Tesco’s fall from grace last autumn was a business teacher’s dream! The news and other websites are full of excellent teaching material on this topic. You could cover strategy, ethics, stakeholders, window dressing and the list goes on!

On October 29th 2013 it was reported by the BBC…

The Serious Fraud Office (SFO) is carrying out a criminal investigation into accounting irregularities at supermarket giant Tesco. Tesco says it has been “co-operating fully” with the SFO.BBC

Last week, the supermarket announced that its profits had been overstated by £263m, up from an initial estimate, made last month, of £250m.

The inflated profit figure was the result of Tesco bringing forward rebates from suppliers.

It is worth asking the question who has been hurt/ affected by this profit overstatement? It’s a great research area for BUSS4 students to look at for their section B, as this covers so much ground of the BUSS4 AQA specification.

Tesco in 2014 alone lost 50% of its market value…

According to the BBC – a share price that drops by 50% may not mean very much to the shopper in the street. Until he or she realises that Tesco’s profits and dividends – slashed by the retailer – make a vital contribution to all of our pension funds. The business is also one of Britain’s largest corporate tax payers. If too many major British businesses fail, then that not only means bad news for UK Plc and, in this case, the supply of groceries – it also means bad news for our savings and the government’s tax income http://www.bbc.com/news/business-29716885

The programme below aired on Radio 4 with Simon Cox trying to unravel the story of the Tesco fallout.

http://www.bbc.co.uk/programmes/b04nvf5v

There are already a number of blogs and websites around that actively dislike Tesco and you have to ask the question how many more will surface with the recent profit overstatement. Tescopoly is one of the major websites campaigning against Tesco and is a great Tescopolysource of material for students –

The Tescopoly Alliance was launched in June 2005 to highlight and challenge the negative impacts of Tesco’s behaviour along its supply chains both in the UK and internationally, on small businesses, on communities and the environment http://www.tescopoly.org/

This is gold dust for students and if you go back 10-15 years and follow Tesco’s rise and fall, their change in management, overseas and UK expansion, it will cover everything you could want for the BUSS4 exam, and give students lots of opportunity for analysis and application marks.

 

Donna Jestin

Teacher of Business

Senior examiner for AQA

Collins Secondary

Collins Secondary is the home of innovative learning resources for all stages of secondary education. We support thousands of teachers and pupils who are using our award-winning materials every day, and provide what you need to enhance the learning experience with our easy to use and flexible programmes.

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